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Embassy Office Parks REIT (Embassy REIT) has reported a 31.19% drop in its net consolidated profit for the quarter ended December 31, 2024. Profit after tax stood at INR 158.19 crore, down from INR 229.90 crore in the same quarter the previous year. Despite this, the company's net operating income (NOI) increased by 9% year-on-year to INR 829 crore. Embassy REIT raised INR 1,000 crore in debt and saved interest costs by approximately 70 basis points. The board announced distributions totaling INR 5,592.57 million for the quarter. The company leased 1.1 million sq ft of space and achieved a portfolio occupancy of 90%, with key markets like Bengaluru, Mumbai, and Chennai seeing strong demand for office space.
Embassy Office Parks REIT (Embassy REIT) reported a 31.19% decrease in its net consolidated profit for the quarter ending December 31, 2024. The company's profit after tax was INR 158.19 crore, compared to INR 229.90 crore recorded in the corresponding quarter of the previous fiscal year, as stated in a filing with the Bombay Stock Exchange (BSE). The company's net operating income (NOI) grew by 9% year-on-year, reaching INR 829 crore. During this quarter, Embassy REIT raised INR 1,000 crore in debt at an interest rate of approximately 7.73%, resulting in savings of about 70 basis points on interest costs. Advertisement
The board of directors of Embassy Office Parks Management Services (EOPMSPL), the manager of Embassy REIT, declared distributions amounting to INR 5,592.57 million, or INR 5.90 per unit, for the quarter ending December 31, 2024. This distribution includes INR 492.90 million (INR 0.52 per unit) as interest, INR 2,246.51 million (INR 2.37 per unit) as dividend, and INR 2,853.16 million (INR 3.01 per unit) as repayment of SPV-level debt.
Ritwik Bhattacharjee, interim CEO of the company, expressed his satisfaction with the performance, stating, "We are pleased to report another successful quarter, highlighted by a 13% increase in distributions and a record quarterly NOI and revenue, driven by strong demand for office spaces in our gateway markets. 2024 was a record year for absorption in India, and we are well-positioned to take advantage of the strong leasing trends in 2025."
Embassy REIT's total consolidated income for Q3 FY25 stood at INR 1,046.03 crore, marking a 5.76% increase from INR 989.09 crore in the same quarter last year. In Q3 FY25, the company leased a total of 1.1 million sq ft, comprising 0.7 million sq ft in new leases and 0.4 million sq ft in renewals. Year-to-date, Embassy REIT has leased 5 million sq ft in FY25 and remains on track to meet its FY25 guidance. Of this leasing activity, global capability centers accounted for 70%. The company's portfolio occupancy was 90% by value, with Bengaluru, Mumbai, and Chennai achieving occupancy levels of over 90%.
In the quarter, Embassy REIT delivered a 0.6 million sq ft office block at Embassy TechVillage in Bengaluru to a global banking major. The company also has a development pipeline of 7.4 million sq ft across Bengaluru and Chennai, with an expected yield on cost of 19%. Additionally, the hotel portfolio recorded a 20% year-on-year increase in EBITDA, with occupancy rising to 59%, up from 55% in the previous year.
Embassy REIT has demonstrated solid growth despite a decline in profit, with a significant increase in net operating income and strong leasing activity. The company is strategically positioned to benefit from robust demand in its core markets and is poised to meet its fiscal year guidance. The growth in its hotel portfolio and development pipeline further strengthens its position for the upcoming quarters. The increase in distributions and strong quarterly performance reflect the company's ongoing resilience and optimistic outlook for 2025.
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